Shahid Khaqan warns of deepening fiscal crisis

Shahid Khaqan warns of deepening fiscal crisis

Awam Pakistan Party (APP) chief and former prime minister Shahid Khaqan Abbasi has expressed serious concerns about the country’s financial situation, questioning how the government will manage its expenditures during the current fiscal year.

Speaking on Pakistan’s economic challenges, Abbasi stressed the need for the rule of law and meaningful reforms. He said no country can progress without addressing structural issues and ensuring that its spending remains within its available resources.

He argued that political stability plays a key role in attracting investment and noted that stable policies usually accompany a stable political environment. Referring to China, he said the country continues to pursue reforms, while both federal and provincial governments in Pakistan have failed to prioritize necessary changes.

Abbasi warned that the government’s expenses continue to rise every year, forcing it to rely on additional borrowing. As a result, the national debt keeps increasing and the economic crisis is becoming more severe. He added that excessive spending beyond available resources often leads to higher taxes, placing a greater financial burden on citizens.

According to Abbasi, debt servicing and interest payments now consume a significant portion of government revenue, leaving limited funds for other needs. He described the past four years as particularly difficult for Pakistan’s economy.

He also pointed out that development spending has declined while administrative costs have grown. In his view, the budget does not reflect any serious effort to reduce government expenditures. He further noted that pension expenses have risen sharply and now exceed many other government operating costs.

Abbasi said the federal government faces mounting financial pressure, whereas provinces have greater access to resources. He questioned the government’s claims of public relief in the budget and emphasized that Pakistan needs fundamental administrative reforms to overcome its economic difficulties. He added that improving institutions and ensuring credible elections are essential for long-term stability and progress.